Speech to the Organisation for Security and Co-Operation in Europe by the Rt Hon Owen Paterson MP

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

It is a great privilege for me to be invited to address your conference this morning.

I would like to begin by paying tribute to the role played by the OSCE, for example…

…In standing up for democracy and fundamental freedoms…

…In encouraging greater economic co-operation among states…

…And in promoting conflict resolution.

In fact as I look around the room I am very conscious of being in the company of people who have literally spent political lifetimes in the search for a political settlement in Northern Ireland.

I can’t claim to be one of those.

Indeed, I am immensely fortunate to be the first Secretary of State to come to office with devolution fully restored and the agreements largely implemented.

And where there are outstanding issues this is entirely down to a lack of consensus on a way forward rather than any unwillingness on our part to see them resolved.

So as a non-participant in the process which led to the Belfast Agreement in 1998, and the subsequent attempts to secure its implementation, I should like to concentrate on the future.

But I would just make a few observations.

My party and the Coalition Government stands fully behind the agreements and the progress they have brought about.

Conservatives played a full part - from John Major right through to David Cameron’s support for the previous government in securing the devolution of policing and justice.

Of course what’s been achieved in Northern Ireland was the result of enormous commitment by people on all sides over many years.

And the peace process had characteristics that are unique to Northern Ireland.

And we do have to exercise a degree of caution before assuming that it can easily be re-packaged and exported for universal application.

We should also be careful to learn the right lessons.

Of course negotiation has a role to play in building and sustaining peace.

But we always need to be clear about the circumstances and conditions under which it takes place.

That is why successive Governments rightly upheld the rule of law over many years in the face of sustained violence…

…why they insisted that only parties committed to exclusively peaceful and democratic means could participate in inclusive negotiations…

…and why any settlement had to be subject to the consent principle at the heart of the 1993 Join Declaration signed by John Major and Albert Reynolds.

In short, the essential conditions for the peace process were that Northern Ireland’s future would only ever be determined by democracy and never by violence.

But today I want to talk about the future and how we move Northern Ireland forward.

As I said, thanks to the painstaking efforts of others I am the first Secretary of State to have taken office against a backdrop of greater political stability in Northern Ireland than at any time for over a generation.

That enables us to move beyond the politics of the peace process, to focus on the issues that most matter to people in their daily lives.

Having secured political stability it is now important that the settlement is seen to deliver.

Otherwise the danger for all of us is that it begins to lose public credibility, which itself could be a source of instability.

Here there are two overriding challenges.

The first is the economy.

I hardly need remind anybody here that across Europe we are still living with the consequences of the biggest shock to our economies since the 1930s.

And the failure of many countries to bring their deficits under control is having serious consequences for economic growth - both in the eurozone and beyond.

In the UK, the current administration inherited the largest peacetime deficit in our history.

And it’s only thanks to the tough decisions taken by George Osborne that the UK has retained the confidence of global markets and been able to keep our interest rates low.

I should add too that the Irish Government has not flinched from taking difficult decisions.

So we do not underestimate the economic challenges we face, which in some respects in Northern Ireland are even more daunting.

For reasons we all understand economic activity in Northern Ireland is far too dependent on public spending.

The private sector is much smaller than in other parts of the UK.

According to reports State spending accounts for over 75 per cent of GDP.

And that’s at a time when there is unprecedented pressure on public finances.

So the UK Government and the Executive are strongly committed to rebalancing the economy.

Not by taking a slash and burn approach to the public sector - after all public spending per head in Northern Ireland remains 25 per cent higher than in England - but by creating the conditions for expanding the private sector and attracting more foreign direct investment.

It will take time, perhaps up to 25 years; but it has to be an urgent priority.

Don’t get me wrong.

Northern Ireland has some world class companies and some global brands. And it is a great place to do business.

But what it lacks is that middle tier of small to medium sized businesses that are the pulse of most major, 21st** century economies.**

We also share a land border with the Republic of Ireland which has a Corporation Tax rate of 12.5 per cent, compared to a UK main rate which by the end of this Parliament will be 22 per cent.

That will be the most competitive rate in the G20 but still significantly higher than it is here in the Republic.

So last year the UK Government, working with the Executive, held a consultation on rebalancing the economy at the centre of which was consideration of whether to transfer responsibility for corporation tax from Westminster to Stormont.

The result was overwhelmingly positive and a Ministerial Working Group - including the UK Treasury, my department and the Executive - is now examining in detail the mechanics of how this might work.

And we hope to be in a position to make a decision on next steps this summer.

Economic regeneration would also go a long way, in the words of the House of Commons Northern Ireland Affairs Committee, ‘to cement the peace’.

Just think of the impact that greater prosperity and jobs could have in parts of Northern Ireland where worklessness and generational unemployment is endemic.

Because it’s in these areas that those small groups of terrorists opposed to the peace process continue to prey and recruit.

Rebalancing the economy is, therefore, imperative.

Indeed it is probably the biggest single contribution the UK Government could make to sustaining peace.

The second great challenge, equally important to sustaining peace, is building a genuinely shared future for everyone in Northern Ireland.

I will touch on this briefly, as most of the policy responsibilities rest with my colleagues in the Executive.

Suffice to say for all the changes we have seen in Northern Ireland the economic and social costs of division remain far too high.

Over 90 per cent of public housing is segregated.

More than 90 per cent of children are educated separately, at a time when there are 85,000 empty school places.

The number of so-called peace walls has actually gone up since the 2006 St Andrews Agreement.

Given the history of Northern Ireland, and the legacy of the past, I realise that tackling these divisions and combating sectarianism will not be easy.

The Executive has made a start.

For our part the UK Government will continue to encourage and support them.

We fully understand that they will have to take difficult decisions; we will back them all the way.

As the Prime Minister made clear in the Northern Ireland Assembly last year, we cannot have a Northern Ireland in which everything is carved up on sectarian grounds.

In his words:

‘We need a shared future, not a shared out future’.

I don’t underestimate how far we’ve come in Northern Ireland.

And a lot of that is thanks to the courage of a large number of people on all sides, many of whom are here today.

They were responsible for building peace.

Now we have to sustain it.

By building on the political stability that’s been hard won.

By moving beyond the politics of the peace process to the politics of delivery.